Correlation Between BE Semiconductor and Pandora AS
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and Pandora AS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining BE Semiconductor and Pandora AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BE Semiconductor Industries and Pandora AS, you can compare the effects of market volatilities on BE Semiconductor and Pandora AS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in BE Semiconductor with a short position of Pandora AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and Pandora AS.
Diversification Opportunities for BE Semiconductor and Pandora AS
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BSI and Pandora is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and Pandora AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pandora AS and BE Semiconductor is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on BE Semiconductor Industries are associated (or correlated) with Pandora AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pandora AS has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and Pandora AS go up and down completely randomly.
Pair Corralation between BE Semiconductor and Pandora AS
Assuming the 90 days trading horizon BE Semiconductor is expected to generate 1.22 times less return on investment than Pandora AS. In addition to that, BE Semiconductor is 1.44 times more volatile than Pandora AS. It trades about 0.07 of its total potential returns per unit of risk. Pandora AS is currently generating about 0.12 per unit of volatility. If you would invest 5,429 in Pandora AS on October 13, 2024 and sell it today you would earn a total of 12,196 from holding Pandora AS or generate 224.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
BE Semiconductor Industries vs. Pandora AS
Performance |
| Timeline |
| BE Semiconductor Ind |
| Pandora AS |
BE Semiconductor and Pandora AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and Pandora AS
The main advantage of trading using opposite BE Semiconductor and Pandora AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, Pandora AS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Pandora AS will offset losses from the drop in Pandora AS's long position.| BE Semiconductor vs. TOREX SEMICONDUCTOR LTD | BE Semiconductor vs. Tower Semiconductor | BE Semiconductor vs. SQUIRREL MEDIA SA | BE Semiconductor vs. NXP Semiconductors NV |
| Pandora AS vs. CALTAGIRONE EDITORE | Pandora AS vs. STEEL DYNAMICS | Pandora AS vs. COSMOSTEEL HLDGS | Pandora AS vs. Sch Environnement SA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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